Lundin Mining has entered into an agreement to sell its indirect stake in TF Holdings to an affiliate of Chinese private equity firm BHR Partners for $1.14bn in cash.
TF Holdings, a Bermuda holding company, owns an 80% interest in African copper mine Tenke Fungurume Mining.
Earlier, Toronto-based Lundin initiated a review of strategic options to sell its interest in TF Holdings. It has an indirect 30% interest in TF Holdings and 24% interest in Tenke.
Lundin president and CEO Paul Conibear said: "The decision to sell our minority interest in Tenke has been arrived at following a careful and lengthy consideration of all options open to us.
“It was a difficult decision, respecting the 20 years of Lundin involvement in Tenke, and the special nature of this world class asset.
“The sale will enable Lundin Mining to advance its strategy to incrementally grow the company with projects and operations we control, while maintaining a strong balance sheet.”
The transaction is expected to be completed in the first half of 2017.
Lundin said that the sale proceeds to be received by the company is equal to the implied value of its stake in TF Holdings based on the transaction between Freeport-McMoRan and China Molybdenum (CMOC) announced six months ago.
In May, Freeport agreed to sell its 56% stake in the Tenke Fungurume copper-cobalt mine in the Democratic Republic of the Congo to CMOC.
The transaction is subject to the receipt of certain regulatory approvals, the completion of Freeport's sale of its interest in TF Holdings to CMOC and other customary closing conditions.
BMO Capital Markets is acting as financial advisor to Lundin in the transaction.
Lundin Mining is a diversified base metals mining company with operations in Chile, the USA, Portugal, and Sweden, primarily producing copper, nickel and zinc.
Image: Canada’s Lundin Mining to sell stake in TF Holdings to Chinese private equity firm. Photo courtesy of "Jonathan Zander (Digon3)"/Wiki.